ASIC continues to focus on funeral insurance
ASIC is continuing to engage with funeral insurance providers as part of its focus on the industry.
As part of its industry review, ASIC raised with TAL Direct Pty Limited (TAL), one of Australia’s largest providers of funeral insurance products under the brand ‘InsuranceLine’, its concerns regarding TAL’s advertising of funeral insurance.
ASIC was concerned that in TAL’s advertising of its funeral insurance product:
premium increases and stepped premiums were not adequately disclosed or explained
qualifications relating to advertised prices were not sufficiently prominent
quoted prices were not representative of the imagery used in the advertising, including the age of the actors.
ASIC’s view was there was a risk that some consumers may be misled about these matters.
‘It is important that funeral insurance ads create realistic consumer expectations, in particular about the cost of the product,’ ASIC Deputy Chairman Peter Kell said.
TAL withdrew its existing funeral insurance advertisements in June 2013, and announced the introduction of its new range of funeral insurance products, with policy features including:
level premiums for the life of the policy; and
‘ASIC generally considers there are features of funeral insurance that can be particularly difficult for consumers to understand such as increasing premiums and that premium payments can exceed the actual benefit to be paid out under the policy,’ Mr Kell said.
‘Designing funeral insurance policies with these types of consumer risks in mind is not only likely to provide significant benefits to consumers but also likely to result in clearer advertising messages.
‘ASIC will continue its focus on funeral insurance and take steps to ensure that consumers understand funeral insurance products.’
ASIC’s discussions with TAL and other funeral insurance providers follows an ASIC report released in July 2012 that identified a lack of consumer understanding of funeral insurance products: Paying for funerals: How consumers decide to meet the costs (REP 292)
See also How will you pay for your funeral? at http://www.asic.gov.au/asic/asic.nsf/byheadline/12-170MR+How+will+you+pay+for+your+funeral%3F?openDocument
20 January 2014.